Saturday, August 22, 2009

Credit Union Unfair Levy

To my readers who want to engage in the campaign - being run between Liverpool and Manchester Co-operative Parties, please copy and forward the enclosed text to all your friends.

I am contacting you to express my outrage that Credit Unions and Credit Union members are being punished for the deeds of greedy and incompetent bankers.

Credit Unions have received an invoice from the FSA to make a payment by 1st September 2009 in relation to the FSCS Deposit Taker Default Levy 2008/2009.

This is a ridiculous situation as Credit Unions are mutual organisations who provide financial services to some of the most deprived communities in the country and asking them to pay for the mis-deeds of massive financial institutions is unfair and unjust.

I am asking you to campaign by contacting Gordon Brown, Alistair Darling, John McFall and as many other MPs that you know to persuade the FSA to reverse this scandalous charge and to issue credit notes to credit unions nullifying the invoices that have been issued.


smithowls said...

Hang on Louise! Before we go using up favours and making appeals; let's get to the bottom of this first. The credit union trade association, ABCUL, is adamant this is not a levy to prop up the fund to 'bail out' the costs of banks failure. They have been monitoring this matter for some time. Rather, let the trade assocaition etablish clearly that there is a case to answer here or is the the long expected charge many of us thought would arrive to pay for credit union failures from the FSCS Fund. By the way credit unions haven't paid a penny, to this fund, yet and we have got it to pay out enormously for famous failures such as Rochdale. Let's get ABCUL to establish a clear response, from the fund, before we fight. If your worst fears are realised we'll all fight.

smithowls said...

John Rose, a frequent commentator on the ABCUL Communities site said; "One CU I'm involved with got zapped to the tune of £17 for this 'beginning' last year. Likely to be £50-ish this year. Unwelcome, but loose change compared to audit fees, CUNA Mutual subs etc and even more inconsequential if you're involved with wages and premises.
And actually, I rather welcome it as a way of demonstrating to members that CUs are regarded as 'serious': we bail out the irresponsible excesses of Northern Wreck etc!
Funnily enough, I was at a building society AGM last week, where the Board was grumbling about a £12.2M impost to the FSCS, nearly 25% of the total operational costs. It seems to align itself with some other BSocieties' view that the levy structure penalises the prudent and safe compared to the rash and greedy, and may be pressing for a 'regrading'.
But as £4m has been paid out to members of failed CUs at very little money cost to other CUs, I think it would make it hard to demand special treatment for CUs".
(Personal views etc.JRR).

Paul said...

Credit Unions are being asked by the FSA to pay an exceptional levy to pay for some recent bank failiures. The levy is an exceptional levy (nothing to do with the main Financial Services Compenstation Scheme fund ) and credit union members are being taxed to pay for the interest incurred on covering the losses caused by the failed banks of Bradford and Bingley, the Icelandic Banks and London Scottish Bank. None of these are credit unions so why should some of the poorest members of society pay for this exceptional levy? This money is going to the Treasury. Even Abcul admit that this is a significant burden on the sector which will rise 24% for the next 2 years. So around £750,000 will be taken out of the credit union movement over a 3 year period, at this critical time when people are losing their jobs and falling into the arms of loan sharks. Given the choice between the Treasury and the Credit Union movement I know where I would prefer this money to be. Some have said Credit Unions dont have to pay much - if that is the case why not exempt them - the small amount wont be missed by the Treasury who have spent billions bailing out the banks. Support Credit Unions not greedy bankers